Crude by rail facility to be built on Houston Ship Canal

KW Express LLC, a partnership between Kinder Morgan Energy Partners, LP and Watco Companies LLC, entered into a long-term agreement with Mercuria Energy Trading Company Inc., to construct a 210,000-barrel-per-day (bpd) crude by rail project at the Greens Port Industrial Park on the Houston Ship Channel.

The project will allow Mercuria Energy Trading to source crude from various origination locations including Cushing, Okla., west Texas, the Bakken shale area and western Canada for delivery by rail into the Houston Ship Channel for distribution to various refiners via pipeline and barges.

The facility will have the capability to unload and load up to three unit trains per day of crude oil and condensate, as well as provide for up to 100,000 bpd of barge loading capacity. KW Express will own 85 percent of the project and, together with Watco, construct and operate the project once completed. Mercuria will own the remaining 15 percent interest of the project.

"This will be the first major crude by rail destination facility in the Houston area with the ability to deliver into the largest refining complex in the world," said John Schlosser, Kinder Morgan Terminals president. "It will provide U.S. and Canadian producers much needed market access and optionality to deliver their crude oil production."